Exlclusive Interview with Mudit Saxena, Head of Retail at Commercial Bank of Dubai for NAB Confex 2019
For the last few years we have seen technology disrupt various industries and it has become imperative for businesses to evolve with this rapidly changing technology landscape, Do you agree that legacy systems are ready for further disruption in the Banking Industry;?
Banks are aware that they have legacy systems and are taking measures to build appropriate middleware to extract data from these systems and present data in a consumer friendly manner to the front end. The pace of consumer demand, competition, technology and regulation will determine how fast there will be disruption.
Financial Technology, nowadays better known under the term ‘fintech‘ are on a rise globally, in your opinion will FinTech’s have an edge over banks in the near future or will partnering with FinTech’s benefit the banks?
Fintechs are great at building technology that addresses a particular need e.g. payments or remittances but they lack a customer base. Banks have a customer base but lack the agility and focus that a Fintech has. Both Banks and Fintech stand to benefit if they partner to provide the best customer experience to customers.
Open Banking or Open APIs are gaining traction, how do you see open baking affect a bank and how will open banking benefit a customer?
Open banking as a concept will provide the best in class customer experience for the customer and the bank. However the key concerns are security and regulation. If regulation permits open banking, traditional banks will be challenged if they do not embrace the concept.
What do you see as the most critical security concerns with Open API’s?
For a bank the biggest concerns are on security of customer data which is housed in banking systems as they will now be exposed to external systems and people. Even without open banking hackers manage to compromise data across industries with some of the largest institutions. By opening up systems you give even more access.
On a global perspective, do you see a bright future for open banking security?
There is no doubt that open banking as a concept is here to stay. How quickly regulators and banks open up and accept the concept will decide how quickly in the future the concept will be accepted.
What do you see as the long-term impact of AI in the banking industry?
AI will have a deep impact in the banking industry. All repetitive tasks like account opening, processing, reporting etc will be replaced with AI. Areas that will have a greater impact in banking are fraud and risk management. Banks have huge amounts of data and the power of AI will be required to detect patterns much better and faster than humans can.
Do you feel that the Blockchain environment is improving for banking and fintech players?
There is improvement and there is usage in various application but significant changes come when regulators and banks are willing to give up control, adopt compete transparency and be willing to give up fees which has a revenue impact.
What are the main areas of synergy or collaboration between Banks and FinTechs?
Every area from customer onboarding to processing to Analytics has scope for collaboration. Speed of collaboration will depend on building models for a win win situation for both banks and Fintechs and regulation.
Do you think that the environment in the region is conducive for FinTechs and is the region prepared for open banking?
The UAE is very open to nurturing and supporting Fintechs however the growth of Fintechs will depend on regulation as well as the cost of adoption of these technologies.
The major technology players, Google, Apple, Facebook and Amazon also known as GAFA are transforming the digital banking landscape. What are your thoughts on GAFA in banking?
GAFA are all digitally native organisations who experts at customer experience as well as analysing data. Banks in their current state will not be able to match their ability in these areas. Theoretically they are better equipped and they will start chipping away in smaller segments like micro payments and remittances. However, regulators and banks have a lot at stake in terms in giving up complete control in terms of security, social responsibility etc. They will not allow the institutions that have been created to close down so easily. However, banks will learn to evolve and regulation will eventually decide in what areas GAFA will be given a free hand and what areas banks will dominate.
What are your parting thoughts on the future of banking in the region?
The region is not subject to extreme weather conditions or distances or the capitalistic model of operation that exists in western countries. The region is also extremely supportive of their citizens and are welfare states.Further, the culture has always encouraged communication and relationships based on physical contact. Whilst the region is open to technology it will see a slower adoption to getting completely digital without the human touch as compared to the west. In addition to regulation, the total cost of technology will also determine the adoption of technology as size of the markets (banking population) is much smaller than other markets. Change will take place but at a slower pace than the rest of the world.
Mudit Saxena, Head of Retail at Commercial Bank of Dubai will be speaking at #NABConfex New Age Banking Confex, 2019.
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